Inflation Update: Faster but full-year average within target
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Monthly Economic Update: Waiting on Jay Powell
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Philippines Trade Update: Trade deficit narrows but not a sign of strength
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The Gist
A daily dose of market updates and smart investment strategies to guide your portfolio decisions
Today's Report
Your Morning Fix
- The Philippines’ trade deficit for the first six months was revised upward to USD 24.41 billion from a preliminary estimate of USD 23.97 billion due to imports being higher than originally reported.
- The Department of Trade and Industry (DTI) has issued 90 e-commerce “trustmarks” as of September 10, with a deadline for mandatory registration on September 30.
- The US Consumer Price Index (CPI) for August saw a 2.9% increase year on year, primarily driven by higher costs for shelter and food.
- Initial jobless claims in the US rose by 27,000 to a seasonally adjusted 263,000 for the week ending September 6, higher than consensus forecasts.
- The European Central Bank left its main interest rate unchanged at 2% and maintained an optimistic view on growth and inflation.
Our Portfolio Recommendation
Our peso portfolio is tilted slightly toward fixed income. While local inflation remains low and monetary easing is likely to continue, yields may be pushed higher by upcoming bond auctions. Continued rate cuts and rising consumer strength are also favorable for local equities, especially real estate and retail. The dollar portfolio is the reverse, with slightly lower fixed income owing to the uncertainty of the effects of tariffs on inflation. US Federal Reserve rate cuts are also closely watched. We remain positive on global equities, with a preference for US sectors, particularly technology, communication services, and financials.
| 2025 Metrobank Forecast | 2026 Metrobank Forecast | 2027 Metrobank Forecast | |
|---|---|---|---|
| GDP | 5.4% | 6.1% | 6.0% |
| Inflation | 2.1% | 3.6% | 3.0% |
| BSP Target Reverse Repurchase Rate | 4.75% | 4.25% | 4.25% |
| Federal Funds Rate | 4.00% | 3.00% | 3.00% |
| USD/PHP | 56.1 | 55.4 | 55.2 |
CHART OF THE DAY
Chart of the Day
US budget deficit falls as tariff revenues rise
The US budget deficit for August fell USD 35 billion or 9% from a year earlier to USD 345 billion as US President Donald Trump’s tariffs pushed net customs receipts up by about USD 22.5 billion for the month, the Treasury Department said on Thursday. With one month to go in the 2025 fiscal year, the year-to-date deficit rose USD 76 billion, or 4% to USD 1.973 trillion. Receipts for August rose USD 38 billion or 12% to USD 344 billion, while August outlays grew USD 2 billion to USD 689 billion. Both receipts and outlays reached new records for the month. Sources: Reuters, Bloomberg
Featured Reports
More Reads
USD/PHP softly rises amid continued demand
- The USD/PHP exchange rate opened 7.5 centavos lower at 57.05 on Thursday, before rapidly rising to a morning’s high of 57.24 as dealers tracked the global buying tone for dollar.
- While importer interest was noticeably light on the move higher, fixing demand supported the pair during the morning session.
- Rallies remain capped for the rest of the day, despite the pair touching a new high for the day at 57.28.
- The USD/PHP exchange rate ultimately closed at 57.191, or 6.6 centavos higher day-on-day.
- The current support levels of USD/PHP are 56.80/90, while the resistance levels are 57.30/40
READ MORE
Local GS sees muted activity despite global rally
- The local government securities (GS) market saw muted trading activity on Thursday despite a rally in global yields, with most bonds opening little changed from prior levels.
- The market focus is on the US inflation data, which printed higher than expected at 0.4% versus a market consensus of 0.3% month-on-month. This is seen as a key driver of medium-term risk sentiment.
- Trading activity was concentrated in the 5- to 10-year segment. Retail Treasury Bond 5-19 traded around 5.81% while Fixed Rate Treasury Note 10-73 saw interest near 5.955%.
- Overall, most benchmark bonds closed within 1 basis point of their previous levels.
- With no major local catalysts ahead, local yields are expected to track global market developments.
READ MORE
PSEi climbs softly ahead of US inflation print
- The Philippine Stock Exchange index (PSEi) ended 6.80 points higher at 6,126.89 on Thursday, as investors largely stayed on the sidelines ahead of the US inflation data release.
- Sectoral performance leaned weak, with only Financials (+0.82%) and Services (+0.56%) offsetting losses in Mining & Oil (-1.28%) and Property (-0.60%).
- Stock-level action reflected the lack of conviction, with DigiPlus Interactive Corp. (+6.82%), Puregold Price Club Inc. (+2.45%) and Aboitiz Equity Ventures Inc. (+2.33%) posting gains.
- Meanwhile, Converge Information & Communications Technology Solutions Inc. (-8.30%), GT Capital Holdings Inc. (-3.57%) and Semirara Mining & Power Corp. (-1.89%) saw heavy selling.
- Value turnover was just PHP 4.88 billion, underscoring the defensive mood. While foreign investors were net sellers of PHP 164.8 million, participation stayed muted at 45% of total trades for the day.
READ MORE
USD/PHP softly rises amid continued demand
- The USD/PHP exchange rate opened 7.5 centavos lower at 57.05 on Thursday, before rapidly rising to a morning’s high of 57.24 as dealers tracked the global buying tone for dollar.
- While importer interest was noticeably light on the move higher, fixing demand supported the pair during the morning session.
- Rallies remain capped for the rest of the day, despite the pair touching a new high for the day at 57.28.
- The USD/PHP exchange rate ultimately closed at 57.191, or 6.6 centavos higher day-on-day.
- The current support levels of USD/PHP are 56.80/90, while the resistance levels are 57.30/40
READ MORE
Local GS sees muted activity despite global rally
- The local government securities (GS) market saw muted trading activity on Thursday despite a rally in global yields, with most bonds opening little changed from prior levels.
- The market focus is on the US inflation data, which printed higher than expected at 0.4% versus a market consensus of 0.3% month-on-month. This is seen as a key driver of medium-term risk sentiment.
- Trading activity was concentrated in the 5- to 10-year segment. Retail Treasury Bond 5-19 traded around 5.81% while Fixed Rate Treasury Note 10-73 saw interest near 5.955%.
- Overall, most benchmark bonds closed within 1 basis point of their previous levels.
- With no major local catalysts ahead, local yields are expected to track global market developments.
READ MORE
PSEi climbs softly ahead of US inflation print
- The Philippine Stock Exchange index (PSEi) ended 6.80 points higher at 6,126.89 on Thursday, as investors largely stayed on the sidelines ahead of the US inflation data release.
- Sectoral performance leaned weak, with only Financials (+0.82%) and Services (+0.56%) offsetting losses in Mining & Oil (-1.28%) and Property (-0.60%).
- Stock-level action reflected the lack of conviction, with DigiPlus Interactive Corp. (+6.82%), Puregold Price Club Inc. (+2.45%) and Aboitiz Equity Ventures Inc. (+2.33%) posting gains.
- Meanwhile, Converge Information & Communications Technology Solutions Inc. (-8.30%), GT Capital Holdings Inc. (-3.57%) and Semirara Mining & Power Corp. (-1.89%) saw heavy selling.
- Value turnover was just PHP 4.88 billion, underscoring the defensive mood. While foreign investors were net sellers of PHP 164.8 million, participation stayed muted at 45% of total trades for the day.
READ MORE